Labrador Iron Ore: Offers good exposure to premium iron ore -Raymond James

Labrador Iron Ore Royalty

06/06/2019 16:51

** Raymond James initiates coverage on royalty company
Labrador Iron Ore Royalty Corp  LIF.TO  with an "outperform"
rating; sets PT of C$35
    ** Brokerage expects co's dividend yield to be over 8% in
2019 and 2020 even assuming lower iron ore prices
    ** Raymond James says co gives investors good exposure to
premium iron ore through its stake in Iron Ore Company of Canada
(IOC) and royalties arising from it
    ** IOC produces higher grade iron ore concentrate and
pellets, which are high quality products that can be sold at a
premium to the ~62% iron ore benchmark price - Raymond James
    ** Brokerage notes additional value might be created if co
was split in a tax efficient manner given royalty companies
historically trade at a higher multiple given their lower risk
    ** Earlier this year, co's major shareholder Altius proposed
splitting the co to achieve higher valuation  urn:newsml:reuters.com:*:nBw30mPl4a
    ** Out of 4 brokerages, 2 rate the stock "buy" or higher, 2
"hold"; median PT C$37
    ** Up to Wednesday's close, LIF shares are up ~32% YTD

 (Reporting by Shanti S Nair in Bengaluru)
 ((Reuters Messaging:
shantis.nair.thomsonreuters.com@reuters.net))